China’s secret war on activists who shone light on anti-Xi Jinping protests; Exclusive Insight: The Core Competitiveness of China's Economy: The Power of Private Enterprise
After Warmth From Biden, South Korea’s Leader Faces a Different Tune at Home; Can China thwart US hypersonic missile defense systems with an old algorithm?
Welcome to this issue of The China Brief. Today is April 29, 2023. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
And here’s today’s exclusive insight:
Exclusive Insight: The Core Competitiveness of China's Economy: The Power of Private Enterprise
When considering the transformation of the national landscape, the most notable advancements, often referred to as "national business cards," encompass state-funded high-speed railways, highways, and iconic urban structures, among other achievements.
These projects are chiefly spearheaded by the government, with some executed directly by the government and others propelled by governmental initiatives. On the other hand, the core competitiveness of China's economy resides in its ability to showcase its strengths on the global stage, thereby posing a challenge or displaying competitiveness against Western powers.
One prominent example is Huawei, which has weathered pressure from the United States, the world's preeminent superpower. Significantly, Huawei is not majority-owned by state-owned capital. Likewise, BYD, the world's top electric vehicle sales company, along with the entire Chinese automotive industry, has a minimal percentage of state ownership. Nevertheless, China's automotive sector, especially in the realm of electric vehicles, has already secured a leading position worldwide. New energy industries, such as wind, solar, and battery power, are predominantly privately-held enterprises. Internet platform companies like Alibaba, Tencent, and JD.com are not only privately owned, but they also attract a considerable share of foreign investment.
High-tech enterprises, including drone specialist DJI, speech technology-focused iFlytek, and numerous AI companies, are primarily private businesses. As these private enterprises expand, state-owned capital starts to play a role; however, the principal driving force behind these businesses' growth from inception to prominence is the power of private enterprise. This constitutes the fourth aspect of the discussion.
(This article is the seventeenth installment in the series "Zhejiang, Zhejiang People, Zhejiang Economy." The author, Ye Feng, is a Zhejiang research scholar.)
China’s secret war on activists who shone light on anti-Xi Jinping protests
Telegraph
Activists linked to last year's widespread anti-lockdown protests in China are being targeted and harassed by the authorities in a campaign of intimidation. Beijing is seeking to intimidate those that it sees as troublemakers, who shed light on the protests, whether they participated in them or not. Li Ying, a Chinese national living in Italy, has been harassed in China by threats to his family and financially cut off. The Chinese state is also finding ways to interfere with Li's work in Italy through anonymous tips to companies about his behavior. The use of economic means to silence dissent is growing and some are calling China's establishment of overseas police stations increasingly reckless.
After Warmth From Biden, South Korea’s Leader Faces a Different Tune at Home
NY Times
President Yoon Suk Yeol’s trip to Washington to draw closer ties with the United States has met criticism at home, where it’s being seen by many as a pivot away from South Korea's historical position of diplomatic caution. He has found support from the Biden Administration and gained praise with a joint statement called the “Washington Declaration,” with an emphasis on America’s embrace of South Korea as a consultative partner in its nuclear strategy for the Korean Peninsula. His homecoming, however, has seen polarising reviews and low approval rates amidst calls to develop their own nuclear force to defend against the expanding nuclear threat from North Korea.
The Biden Administration has promised to embrace South Korea as a nuclear partner but has urged the country to not develop its own nuclear arsenal to defend against future threats. Critics of President Yoon in South Korea argue that the “Washington Declaration” signals more emphasis on the U.S.'s concerns about South Korea developing its own nuclear weapons, further alienating and endangering their relationship with China. The fear compounded with increasing fears over rising inflation rates and the impact of the “Inflation Reduction and Chips and Science Acts” on the country’s electric car, and semiconductor industries has increased domestic scrutiny on President Yoon.
In his departure speech to the United States, President Yoon acknowledged the importance of the relationship between the United States and South Korea, which only seems to grow more important as South Korea takes a larger role in the international arena. However, there is the question of whether South Korea’s pivot away from its longstanding tradition of diplomacy caution is the right move in the current political climate.
Didi zooms past big fine and Covid-19 to narrow losses in 2022
South China Morning Post
Chinese ride-hailing company Didi Global has reported a 52% reduction in its net loss for 2022 despite lowering revenue and an eight-figure fine from the country’s cybersecurity administration last year. Revenues were adversely impacted by the Covid-19 pandemic leading to fewer ride-share journeys being taken, while Didi’s mainland operations also took a hit from the CNY8bn ($1.23bn) fine it received soon after going public in the US. However, March figures point to a return to business as usual, with the firm seeing a 42% YoY increase in daily transactions. Didi has also announced new ventures in logistics and self-driving, culminating in the launch of a prototype robotaxi, Didi Neuron.
TikTokers making six-figure incomes via app worried about potential ban
Toronto Star
Canadian TikTok influencers are concerned about a possible worldwide ban on the app over fears that sensitive user data could be handed to the Chinese government. Lawmakers from Canada, the US, Europe, India, and New Zealand have already banned the app from government devices, despite assurances from its owner, ByteDance, that user data wouldn't be used by the Chinese government or promote pro-Beijing propaganda. Some Canadian influencers, such as mural artist Tina Nguyen and comedian Darcy Michael, fear that a ban would affect their livelihoods and personal brands, despite other sites selling user data for profit.
US ex-security adviser calls for closer ties with Taiwan
Toronto Star
During a visit to Taiwan, former US national security adviser John Bolton called for stronger collaboration between the US and Taiwan over military strategy and the collective return of opposition against China in relation to Taiwan. He warned of the urgency of constructing contingency plans between the two nations over possible retaliatory action from Beijing, saying it would be too late after an attack has occurred. Bolton also demanded the removal of the backlog of around $19bn in U.S. military sales to Taiwan, suggesting that strengthening Taiwan's defense infrastructure is crucial for global reasons.
US says moving with ‘urgency’ to protect data as TikTok concerns persist
South China Morning Post
The US Commerce Secretary has confirmed that dozens of staff will be hired to monitor, investigate and enforce risks to Americans’ data from foreign firms. Gina Raimondo flagged concerns around China’s TikTok as one example of the risks, which have led lawmakers to consider whether the app should be banned. Last month, Senators Mark Warner and John Thune proposed new legislation granting the Commerce Department authority to review or block foreign transactions posing national security risks. TikTok, which denies any such risk, has over 150 million US users.
Saudi Arabia, Iran to reopen embassies ‘within days’: Minister
Al Jazeera
Iran and Saudi Arabia are set to reopen their embassies in each other's capitals "within days," according to Iranian Foreign Minister Hossein Amir-Abdollahian, signaling a potential thaw in previously tense relations. The two sides agreed to re-establish diplomatic ties and reopen their respective embassies during a meeting in China last month. Their relationship has been troubled for years, due to alleged tensions over Iran's involvement in the Yemen conflict, which sparked a number of conflicts in the region, including the Syrian civil war.
N Korea threatens arms race after US-S Korea deal
BBC
Kim Yo-jong, North Korean leader Kim Jong-un's sister, has warned that the recent US-South Korea Washington Declaration will expose peace and security in North-East Asia to a 'more serious danger'. The US will deploy nuclear-armed submarines to South Korea to counter nuclear threats from North Korea while Seoul has agreed not to develop its own nuclear weapons. Ms. Kim, who holds a position in the Central Committee of the Workers' Party of Korea and is influential over her brother, stated that North Korea's nuclear deterrent 'should be brought to further perfection'.
How surreptitious shipping is helping Russia
Financial Times
Vessels with gaps in their automatic identification transmissions have reportedly been congregating in the Kerch Strait since Russia's invasion of Ukraine in 2014. According to data from Lloyd’s List Intelligence, 586 ships, the majority Russian-flagged, enacted 1,753 AIS gaps in Q1 2019, mostly cargo vessels or tankers. The vessels’ presence suggests Russia is attempting to undermine Western sanctions and may be transporting contraband produce, possibly stolen Ukrainian grain, or dodging international trade restrictions. Several countries that have not condemned the Ukraine invasion, such as India, China, and the UAE, have also not signed up to Western-led sanctions.
Can China thwart US hypersonic missile defense systems with an old algorithm?
South China Morning Post
Researchers from the PLA Strategic Support Force Information Engineering University claim to have developed a technology that can outsmart the world's most advanced hypersonic missile interception systems. The technology is based on an algorithm that can analyze the trajectory of hypersonic weapons used by China to evade missile defense systems. The algorithm is based on the statistical method of multi-model adaptive estimation (MMAE), which is used by Zhang Xuesong and his team to help China's hypersonic weapons evade interception while minimizing the number of resources needed for calculations; this means that China's hypersonic weapons could avoid US missile defense technologies. This could be a strong advantage in any potential conflict involving hypersonic weapons, although the actual capabilities of China’s hypersonic weapons and their ability to evade US missile defense systems are not publicly known.
Russian oil snapped up by India still powering Europe despite sanctions
South China Morning Post
India is on course to become the largest supplier of refined fuels to Europe as it buys up record amounts of Russian crude; India takes Russian crude and turns it into fuels, such as diesel, which it then sells to Europe at a markup. The EU barred almost all seaborne crude oil imports from Russia in December 2014, extending the prohibition to refined fuels two months later. Despite the sanctions, Russian oil is starting to find its way back into Europe, albeit via a more circuitous route. As Russia sells more crude to India, the Asian country becomes Europe’s largest supplier of refined fuels; European countries find themselves competing with Indian refiners to access the cheaper crude.
Scandal-ridden Chinese soccer gets in foul trouble again
Nikkei Asia
China's deputy director of sports administration and party secretary of the Chinese Football Association, Du Zhaocai, has been dismissed from his vice-ministerial level position following an investigation by national graft busters. This is the latest move in China's crackdown on corruption in sports, which has often made headlines for the wrong reasons such as match-fixing and lavish salaries for players.
Amid concerns about TikTok, U.S. commerce secretary details effort to secure America’s data
The Globe And Mail
The Biden administration is to increase monitoring of foreign companies’ handling of Americans’ data in a bid to address security concerns, Commerce Secretary Gina Raimondo has said. The department will recruit a team to look for companies that may pose problems to US networks and data, with TikTok among those attracting attention. Last month, senators, backed by 24 colleagues, proposed the Restrict Act, which would give the Commerce Department more power to review or block transactions, but which critics say threatens civil liberties.
China ‘police station’ case shows U.S. ramping up use of foreign agent laws
Japan Times
The US Justice Department charged at least 25 people with violating the Foreign Agents Registration Act in 2021, the highest number since 2003, as foreign activity in the US increases. The charges come as the US continues to investigate foreign actors, including Russia and China, seeking to influence elections, business, and technology deals in the country. Experts said the recent use of the historic law has mainly targeted those carrying out harassment on US soil, marking a transition from its previous use against traditional espionage. However, the cases have rarely gone to trial as defendants opt for guilty pleas or are overseas.
Europe takes tougher stance toward China in boost to U.S. policy
Japan Times
European countries including Germany and Italy are considering placing limits on Chinese exports and investments to side with a strategy championed by the US, amid increasing frustration with China's perceived aggression against its own people and its alliance with Russia, in spite of the Ukraine conflict. The change reflects a significant shift for a continent that has previously resisted American efforts to wind down economic ties with China. While there remain important differences, there is a growing sense of vulnerability towards the global pandemic response of the leaders of the world’s second-largest economy.
Scores of mainland Chinese tourists flock to Hong Kong for ‘golden week’ holiday
South China Morning Post
Tourism in Hong Kong is on the rise with the start of the Labour Day “golden week” holiday. The high-speed rail terminal in West Kowloon station experienced a steady influx of visitors, coming from various cities on the mainland. Winding queues were seen at ticket kiosks and customer service counters at the rail station and at Austin MTR station. On average, visitors expected to spend around HK$3,000 on amenities during their 3-day trip.
Hong Kong Approves 33,000 Talent Visa Applications, SCMP Says
Bloomberg
Hong Kong has approved over 33,000 talent visa applications this year in a bid to attract skilled foreign workers and counteract a decrease of 2.4% in the city's working population in 2020, according to Chief Secretary Eric Chan. Seven schemes aimed at skilled global workers including mainland China residents will enable Hong Kong to reach its goal of attracting 35,000 foreign workers in 2021, he added. The Top Talent Pass Scheme has approved 15,000 of the 24,000 applications it has received since its launch last year, granting two-year work visas.
Japan PM Kishida to visit South Korea for summit with Yoon - Kyodo
Reuters
Japanese Prime Minister Fumio Kishida is expected to visit South Korea soon and meet with President Yoon Suk Yeol, as a reciprocal visit to the South Korean leader's Tokyo visit last month. The meeting is expected to be prior to Kishida hosting a G7 summit on May 19, and their main aim will be to confirm the two neighbors' strengthening of cooperation over North Korea ahead of the Hiroshima G7 summit. Ties between Japan and South Korea, long strained by issues such as wartime compensation and trade, have been improving in recent months due to North Korea's frequent missile launches and China's more prominent role on the global stage.
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